"Overall I think it (Chinese economy) is very optimistic," Nobel laureate in economics Joseph Stiglitz said in Hong Kong Tuesday.
Consumption in the United States, which used to be the engine of the global economy, is now not working and many are looking to China for signs of hope. There is confidence that China will report an economic growth close to 8 percent, Stiglitz said.
The Chinese government has said it is aiming at an economic growth of about 8 percent in 2009.
The World Bank forecast a growth of 6.5 percent for the Chinese economy, compared with a negative growth of around 1.5 percent for the global economy as a whole. Stiglitz said he personally "think more in the range of 5 to 6.5 percent."
"Even that I want you to recognize as a real achievement in the context of a world with such external conditions and in the context of a country that is so integrated into the global economy, " he said, citing dramatic and unprecedented decline in Chinese exports recently.
The stimulus package put forward by the Chinese government was "large" and some of the measures that have not been included in the package will also have the effect of stimulating the economy, like the planned measures to help migrant workers, he said.
Getting consumer spending to work as the engine will be one of the key challenges, the 2001 Nobel laureate in economics said in the keynote discussion at an investment conference with Douglas Holtz-Eakin, former chair of the U.S. Council of Economic Advisors and Dong Tao, executive director and chief economist Asia of Credit Suisse.
The household savings rate in China is a little high but not very high, and the real problem is high corporate profits, he said.
The current crisis marked the end of the American lifestyle and the end of Asia's growth model. After the crisis, the competitiveness of industries such as machinery, ship building, steel and automobile in China will be at the next level, said Tao.
Restructuring of the economy will be a must for China, Stiglitz said, adding that some of the restructuring needed has been outlined in China's 11th five-year plan.
(Xinhua News Agency March 24, 2009)
